Sanden : Financial Results of 3rd Quarter

Financial Results of 3rd Quarter for the Year Ending December 31, 2023

November 2023

Sanden Corporation

© 2023 SANDEN CORPORATION

CONTENTS

Progress in Activities for Growth

1. Progress of the business revitalization plan

2. Realization of a virtuous cycle for growth

3. Production response to major new project wins

4. Technology Development Initiatives for Future Growth

5. Quality Enhancement Activities

6. Initiatives for Realization of a Sustainable１Society６

Financial Results of 3rd Quarter for the Year Ending December 31, 2023

1. Points of the financial results
2. Summary of consolidated financial results
3. Sales by region from the automotive systems business segment
4. Operating income（Year-on-year comparison）
5. Cash flows from operating activities（ Year-on-year comparison ）
6. Consolidated balance sheet （ Year-on-year comparison ）

P.1	© 2023 SANDEN CORPORATION

1．Progress of the business revitalization plan

Progress in Activities for Growth

Sales are growing faster than planned due to diversification of electric vehicles and increased demand for electric compressors. Investment in growth strategies has been increased in line with the acquisition of future business that exceeded expectations.

										102 （100 million yen）
						1,830		84
			1,756		Operating profit（Plan）
								Plan period ：Until March 31, 2026
									1,654	1,705
						1,590
1,626
			51
Sales			1,471						*In accordance with the resolution to
1,437										partially amend the Articles of Incorporation
										at the 95th Annual General Meeting of
			5								Shareholders held on June 25, 2021, the
										Company changed its fiscal year-end from
											March 31 to December 31. Therefore, the
Plan Results	Plan Results	Plan Forecast	Plan	Results
plan represents the 12 months from April to
2021		2022		2023		2024	2025
			March, and the actual results from January

to December.

-29		Operating profit （ Results / Forecasts ）
-57	-57

-212

P.2	© 2023 SANDEN CORPORATION

2．Realization of a virtuous cycle for growth

Progress in Activities for Growth

Acquire new commercial rights in the future

*Total lifetime sales of acquired commercial rights (the total amount of sales obtained over the lifetime of each deal from the start of mass production)

			◆New commercial rights acquisition in each area
			Europe: Received ECH business for next generation BEV vehicles from a premium customer
				Received an order for HVAC business from a major passenger car manufacturer
1.5 times	（ 100 million yen ）	( the largest order in history of our company)
			Americas: Received an additional order for electric compressor from a major electric vehicle
				manufacturer
			China: Acquired ITMS business from a major construction equipment manufacturer
		3,258	Japan: Large order for air conditioning system from a major customer
2,185			Asia:	Received an order for electric compressors from a major local manufacturer
			※Major products: Electric compressors, ECH, HVAC, ITMS,
Jan-Sep	Jan-Sep		mechanical compressors, etc.
ECH：Electric Coolant Heater
2022		2023
	HVAC： Heating, Ventilation and Air Conditioning
			ITMS：Integrated Thermal Management System

1.4 times
	（ 100 million yen ）
		Expenditures
Growth Investment		for
Expenses	68	acquisition of
48		tangible fixed
	Jan-Sep	assets
Jan-Sep
2022	2023

1.7 times

（ 100 million yen ）

79

46

Jan-SepJan-Sep

2022 2023

P.3	© 2023 SANDEN CORPORATION

3．Production response to major new project wins

Progress in Activities for Growth

Preparation and reinforcement of global production system in line with the expansion of new commercial rights acquisition

2023	2024	2025	2026
Americas			Europe
▸ Start of mass production of
▸Electric Compressor
electric compressors
		( Generation 5) Start of		mass
( Generation 4 ) 2023 4Q
production	2025
				Japan
						▸ECH ( Generation 3)
China						Start of mass production
					* For Europe and Americas
▸ECH (Generation 3) Start of
mass production	2023 4Q				2026
			▸HVAC
						Start of new line operation
		※ECH：Electric Coolant Heater	2026
		※HVAC： Heating, Ventilation and Air Conditioning

P.4	© 2023 SANDEN CORPORATION

Progress in Activities for Growth

4．Technology Development Initiatives for Future Growth

• Evolution of ITMS （Integrated thermal management system）

ITMS contributes to the realization of a low-carbon society as well as to cabin comfort through air conditioning.

① Extension of vehicle cruising range

②Maintenance and suppression of deterioration of parts such as batteries and e-Axle

132% 140%

0%100%

ITMS2.0		Conventional
		products
	（Electric heater used
ITMS2.0 is called the direct method, which puts		in winter）
	ITMS2.0
refrigerant directly into the air conditioning unit. It is highly
responsive and can cool and heat quickly!		ITMS3.0

ITMS3.0	（ Reference ） Exhibited at Japan Mobility Show 2023
ITMS3.0 is an in-directmethod, and in the case of
systems using propane gas as refrigerant, which is PFAS	Sanden exhibited at the JAPAN MOBILITY
compliant with environmental regulations, the amount of
SHOW 2023 held at Tokyo Big Sight under the
refrigerant can be reduced as much as possible.	concept of "Create THE FUTURE SCENES".

P.5	© 2023 SANDEN CORPORATION

Progress in Activities for Growth

4． Technology Development Initiatives for Future Growth

• Number of Patent Applications

		Air Conditioning System			heat exchanger
				Construction
Others
		Machinery

3rd quarter

applications on target

Compared to applications in 2022

4times

3times

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

• CY23 Application continued to be filed from Jan-Sep. Progress as planned

(75% of applications filed)

• CY22 Rate of increase in applications： 4 times that of CY20 (441%)
  3 times that of CY21 (297%)
• Air-conditioningsystems and EC-related applications, which will be the axis of future growth, account for 76% of total

applications.

Air conditioning systems: 5times (538%) compared to CY20, 3times (333%) compared to CY21

EC: 4times (381%) compared to CY20, 3times (265%) compared to CY21

P.6	© 2023 SANDEN CORPORATION

5．Quality Enhancement Activities

Progress in Activities for Growth

Sanden is determined to continue to provide "good products that benefit customers," as stated in our corporate motto, Sanden has designated the year 2023 as the "First Year of Quality" and is once again working to enhance quality.

Major Quality Awards

1998 Received "Deming Prize Award" for company-wide quality control

2002 Received "Japan Quality Control Award"

2003 Received "TPM World Class Award"

2006 Sanden International USA and Sanden International Singapore received "Deming Prize".

2011 Sanden Vikas (India) received "Deming Prize".

Major quality awards received in the 3rd quarter of 2023

Top 3 "Quality Power

Up Award" from

Hitachi Construction

Machinery Tierra

Received "Excellent Award" from Caterpillar, the highest evaluation of quality

P.7	© 2023 SANDEN CORPORATION

80.04%reduction by 2030 based on 2019

Annual renewable energy procurement from 0.2% in 2019 to 100% by 2030

27.5% reduction by 2030 based on 2019

6．Initiatives for Realization of a Sustainable Society

Progress in Activities for Growth

■Sanden Group's Greenhouse Gas (GHG) Emission Reduction Targets have obtained SBT certification.

Sanden Group's greenhouse gas (GHG) emissions reduction targets by FY2030 have been recognized as science-basedshort-term targets by SBTi.

■Sanden Group's GHG reduction targets certified by SBT

Scope1・2

Scope2

Scope3

• Sanden Forest certified as a "Site for Symbiosis with Nature" by the Ministry of the Environment

The "Site for Symbiosis with Nature" is a government- approved area where biodiversity is being conserved through private-sector efforts, etc. This certification system was first implemented in Japan.

Since April 2022, we have been participating in the "30 by 30 Alliance for Biodiversity," an activity to achieve the goal of conserving and protecting at least 30% of Japan's terrestrial and marine areas by 2030 (30 by 30).

Sanden Forest

P.8	© 2023 SANDEN CORPORATION

CONTENTS

Progress in Activities for Growth

1. Progress of the business revitalization plan

2. Realization of a virtuous cycle for growth

3. Production response to major new project wins

4. Technology Development Initiatives for Future Growth

5. Quality Enhancement Activities

6. Initiatives for Realization of a Sustainable Society

１６

Financial Results of 3rd Quarter for the Year Ending December 31, 2023

1. Points of the financial results
2. Summary of consolidated financial results
3. Sales by region from the automotive systems business segment
4. Operating income（Year-on-year comparison）
5. Cash flows from operating activities（ Year-on-year comparison ）
6. Consolidated balance sheet （ Year-on-year comparison ）

P.9	© 2023 SANDEN CORPORATION